British pharma giant
) recently announced that it has completed the acquisition of
10,000,000 shares of biopharmaceutical company
). Shares were acquired for approximately $21.2887 per share.
Theravance shareholders approved the deal at their Annual
Meeting held on May 15, 2012. With this transaction, Glaxo
increased its holding in Theravance to 26.7% from 18.3%. Glaxo
currently owns 25,814,421 shares of Theravance.
The increased holding by the pharma major reflects its
confidence in the Relovair program, under which the companies are
looking to replace one of Glaxo's best selling drugs, Advair, by
evaluating treatment options for asthma and chronic obstructive
pulmonary disease (COPD).
We remind investors that in November 2002, GlaxoSmithKline had
entered into a collaboration agreement with Theravance. Per the
deal, the companies are looking to develop and commercialize a
once-daily long-acting-beta 2 agonist (LABA) candidate both as a
single agent and as a combination therapy for the treatment of
asthma and/or a long-acting muscarinic antagonist (LAMA) for COPD.
These programs are collectively known as the Relovair program
(phase III completed).
Glaxo intends to seek approval for Relovair in the U.S. and
Europe in mid-2012 for the COPD indication. The pharma giant also
intends to seek European approval of the drug for treating asthma
patients in mid-2012. Regarding the U.S. approval of Relovair for
the asthma indication, Glaxo is in discussions with the U.S Food
and Drug Administration (FDA). Furthermore, the LAMA/LABA program
is undergoing phase III development for treating COPD patients.
A major part of Glaxo's revenues will be exposed to generic
competition as multiple drugs are scheduled to lose exclusivity in
the next few years.
We expect the company's top line as well as gross margins to
remain under pressure in the coming quarters. In addition to
generic competition, the U.S. health care reform and EU pricing
pressure will continue to affect sales.
Glaxo is looking towards deals and acquisitions to drive growth.
The company is focusing on increasing the rights on its partnered
products and promising pipeline candidates, so that it stands to
benefit more from their success.
A few days ago, Glaxo entered into an agreement to acquire
80.02% shares of a UK and Germany-based, privately-owned company,
Cellzome, for a cash payment of £61 million (U.S. $99 million).
Glaxo already owns 19.98% shares of Cellzome and after the
completion of this deal will own the full company. The acquisition
is expected to be completed on May 21, 2012.
Apart from this, Glaxo has launched a hostile bid to acquire the
outstanding shares of
Human Genome Sciences, Inc.
) for a cash payment of $13 per share.
Glaxo would get exclusive rights to Benlysta as well as other
candidates such as darapladib and albiglutide, if it succeeds in
acquiring Human Genome.
We currently have a Neutral recommendation on Glaxo. The stock
carries a Zacks #3 Rank (Hold rating) in the short run.
GLAXOSMITHKLINE (GSK): Free Stock Analysis
HUMAN GENOME (HGSI): Free Stock Analysis Report
THERAVANCE INC (THRX): Free Stock Analysis
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